PXL/HO/Cir-089/2020-21 Date: 22.10.2020
Panama introduces EMMA tax regime to attract foreign manufacturing firms
Dear Sir / Madam,
Subject: Panama introduces EMMA tax regime to attract foreign manufacturing firms.
We are pleased to inform our member-exporters that Council has received a communication from Embassy of India, Panama with regard to investment opportunities in PANAMA after creating “EMMA“ a special regime for manufacturing firms.
As part of a plan to boost and reactivate the national economy of Panama after the COVID-19 pandemic, on 31st August 2020, President Laurentino Cortizo signed a new law to create the special regime called EMMA. The Special Regime for the Establishment and Operation of Multinational Companies for the Provision of Services Related to Manufacturing (EMMA) establishes special rules for operation of multilateral firms providing the production services.
This regime is aimed at new companies that want to take advantage of the incentives, or for companies that are currently registered under the headquarters of multinational companies' regime, and who wish to expand their services within the same economic group under a new light manufacturing division. The companies will get a whole range of exemptions. In particular, the tax regime provides for the tax break up to 5% for the next 5 years after company registration in the EMMA tax regime. The employees of organizations will be able to claim a 50% bonus for working on holidays as well a 25% bonus for working overtime.
In view of the above and the importance of the incentives under the EMMA scheme supplement well the geographic position of Panama, its wide reach with FTAs and as logistics & transport hub, and provide good opportunities for the Indian firms to consider investment in the country.
A more detailed write-up on the EMMA scheme is also enclosed for information of the members.
Thanks & regards
Encl: A write-up on the EMMA scheme